Happy customers are the lifeblood of business. They buy your products and services. They work as advocates for your brand. And ultimately, they help keep your business relevant in a highly competitive market. But what about unhappy customers?
While it’s tempting to praise the people who like us most, the not-so-happy customers also determine our success or failure.
Consider the consequences of one of the most viral customer videos of all time, posted by an unhappy United Airlines customer.
Just 4 weeks after Dave Carroll released United Breaks Guitars, United Airlines stock price fell 10%. The drop resulted in a $180 million loss for stockholders. The actions of just one unhappy customer resulted in a PR nightmare for United Airlines and millions of dollars down the drain for investors.
Now take a look at the average lifetime value of a Starbucks customer, as calculated by Kissmetrics. Over the course of 20 years, a Starbucks customer is expected to bring in just over $14,000 for the java giant. That’s nothing to sniff at, but compare the two customers and you’ll see the discrepancy. Unhappy customers need attention.
Even though the incident created a bit of a crisis for United Airlines, it did end happily. A month after working with Carroll to rectify the situation, United Airlines stocks traded as high as $6, representing an 81.27% overall increase.
Sometimes unhappy customers force companies to confront and solve the problems that are negatively impacting their business. And those solutions can lead to major success.
3 Reasons Unhappy Customers Are Valuable
1. Unhappy customers give the most honest feedback.
The only way to stay relevant is to focus on catering to customers’ changing needs. The easiest way to reveal those is to ask.
A customer feedback program provide actionable insights on products and services. If a number of customers are all complaining about the same thing, you should probably consider fixing it. By leveraging that kind of feedback, companies can step outside their internal perspective to find solutions that drive revenue and make customers happy.
Remember what Domino’s did years back? After getting labeled the worst-tasting pizza on the market, they decided to do something about it. Domino’s publicly admitted to their pizza’s poor quality, worked hard to change their recipes, and launched a new website and social media campaign. This campaign encouraged food bloggers and food lovers to try the new recipe and share feedback on social media.
This marketing approach didn’t just improve their ratings—it made their sales skyrocket.
Domino’s isn’t the only big company to benefit from honesty. Best Buy, NASCAR, and Yahoo have turned customer feedback into significant and positive change.
Eliciting feedback—specifically negative—to make smarter business decisions is critical to the long-term success of any company.
2. Unhappy customers help hone customer service skills.
Every business owner and customer-facing employee has dealt with the displeased. Unhappy customers shouldn’t be avoided or even dreaded. They present the best opportunities for growth by putting customer service and problem-solving skills to the test.
Ritz-Carlton is a great example. They use proactive customer service practices to avoid disaster. Employees are trained to offer a free appetizer (compliments of the chef) to any diner that waits more than 20 minutes for their food. Instead of a weak apology, this approach solves the hunger problem, resets customer expectations, and refocuses attention on the Ritz’s wonderful service.
Negative feedback is a chance to win back favor and improve customer experience.
3. Unhappy customers help manage online reputation.
When customers are upset, businesses brace for bad reviews, and for good reason. Zendesk found that 45% of customers surveyed had shared bad customer service experiences on social media.
Bad reviews aren’t just an ego hit—they’re very bad for business. A BrightLocal study found that 88% of consumers trust online reviews as much as recommendations from friends, and they have a major impact on purchase decisions. In other words, online reputation management is more important than ever.
When you receive negative feedback online, take the time to respond to customers. Whether or not their criticism is justified, go above and beyond to solve the problem. Your efforts will appear online for all to see, and that sends a positive message.
KLM customer service makes excellent use of social media. As a result, their Facebook page touts an impressive 24-minute average first response time and a 92% response rate. Any customer with a complaint can visit their page, ask a question, and expect a quick response.
The rise of social media and review sites makes it increasingly difficult to manage an online reputation. So nowadays, the simplest way to avoid bad publicity is to ask for it directly.
Companies can send customer surveys at specific, critical moments—like after support interactions—to get ahead of bad situations. Net Promoter Score surveys and customer satisfaction surveys keep a constant pulse on customer health and help companies spot trouble before customers churn.
Retaining unhappy customers can pay off big time. On average, it’s 7 times more expensive to acquire a new customer than it is to keep an existing one. So feed your existing relationships—they’re worth it.
And remember, when unhappy customers share their experiences, they’re teaching you how to make your business better. If you design your organization around effective communication, customers are more likely to share their problems directly rather than publicly.
Over time, those insights will help you build a customer-centric brand that drives customer loyalty by showing a commitment to customer happiness.
Editor’s Note: This post was originally published in June 2016. It’s been updated for accuracy and freshness.